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India's new government was yesterday struggling to make headway in its first foreign crisis as it tried to secure the release of 40 construction workers being held in war-torn Iraq, home to some 10,000 Indian expatriates.

Prime Minister Narendra Modi has sent a former ambassador to Baghdad to coordinate rescue efforts while the chief minister of Punjab province - where most of the workers hail from - has said he was willing to pay a ransom for their freedom.

But while India's foreign ministry has described the men as having been "kidnapped", it says it does not know who has taken and that it has not received a ransom demand.

The ministry said yesterday it had learnt the location of the workers and was pursuing "every avenue" in a "tenuous security situation".

"In situations where there exists no single authority, where there exists no established interlocutors, we are trying to do our best in the circumstances," foreign ministry spokesman Syed Akbaruddin said.

The ministry said it was working with the Red Crescent Society and other aid groups in Iraq, but acknowledged the situation on the ground was "very difficult".

Iraqi Red Crescent president Yaseen Ahmed Abbas said the group had been taken away in several vehicles by armed men while they were working on a stadium in Mosul. "We don't know what happened to them," Abbas said. "It is difficult to talk to the insurgents, there is no official who we can talk to."

Underlining the confusion, some of the family members told Indian media that they had spoken to several of the workers, who denied that they were being "held hostage".

Charanjit Singh said he spoke for several minutes on Wednesday to his brother, whose captors have claimed they would eventually be released.

"He said he and his co-workers from India were all safe and not held hostage," Singh toldThe Hindu newspaper.

While India has a record of evacuating large numbers of its nationals from war zones, including from Iraq during the 1991 Gulf war and from Lebanon in 2007, analysts say the situation this time was complicated by a variety of factors.

In a front-page editorial headlined "First foreign policy test for Modi", theHindustan Times said the prevailing chaos in Iraq made it hard for New Delhi to work out who to interact with.

"Handling a crisis like this is a tough task. With the fighting spreading, even evacuating people by road is not an option," it said. "Rebels have seized swathes of territory. The Iraqi government's writ doesn't run in areas like Mosul or Tikrit. There is little New Delhi can hope to achieve through government channels."

The paper also warned that many expatriates could resist efforts to evacuate them, saying most of a group of some 50 nurses working in late dictator Saddam Hussein's hometown of Tikrit had told the Indian mission they would like to stay.

Indian Foreign Minister Sushma Swaraj said she was "leaving no stone unturned to find a solution to this". But Delhi-based analyst Ajai Sahni said the Modi-led government was "in a fix" and did not appear to have a coherent crisis strategy.

"They don't know who to contact or how to get thousands of our people out," the Institute for Conflict Management director said. "They will have no option but to go around begging neighbouring governments and local middlemen to save our people."